ACE Q1 Net Down 3% to $433 Million; Operating Profits Rise 7% to $441 Million

Bermuda’s ACE Limited reported net income for the first quarter ended March 31, 2005 of $433 million or $1.46 per common share after payment of preferred dividends, compared with net income of $447 million or $1.53 per share for the same quarter last year, a 3 percent drop.

Operating earnings (which exclude net realized gains/losses), however, increased by 7 percent for the first quarter to $441 million, or $1.49 per share, compared with $411 million or $1.40 per share for the same quarter a year ago. (Note)

President and CEO Evan Greenberg commented: “This was a very good quarter for ACE. We had record operating income, led by substantial increases in earned premiums and net investment income, and excellent P&C underwriting results as reflected in a combined ratio of 89.2 percent. Our written premium growth rate is naturally slowing in line with a softening rate environment and our determination to maintain underwriting discipline.”

ACE’s bulletin noted other first quarter operating highlights as follows:
— P&C net earned premiums increased 15 percent over the prior year quarter
— The P&C combined ratio was 89.2 percent for the quarter compared with 88.4 percent a year ago
— Operating cash flow amounted to $1.2 billion for the quarter
— Invested assets increased by $756 million from year-end 2004
— Net investment income increased 19 percent to $284 million over the prior year quarter
— Shareholders’ equity increased to $9.9 billion from year-end 2004
— Tangible equity rose to $7.3 billion, a gain of 2 percent from year-end 2004
— Debt to total capital ratio improved to 16.1 percent from 16.3 percent at year-end 2004
— Return on equity for the quarter was 18.4 percent; excluding FAS 115 it was 19.4 percent. (Note)
— Diluted book value per share as of March 31, 2005 was $32.62 (Note)

Financial results by business segment compared with prior year’s results follow. Further details are available in the financial supplement. Key items include:
— Insurance-North American: Net premiums written increased 18 percent for the quarter and the combined ratio was 88.6 percent.
— Insurance-Overseas General: Net premiums written were flat for the quarter. The segment’s combined ratio improved to 87 percent.
— Global Reinsurance: Net premiums written were down 7 percent for the quarter. This segment had a combined ratio of 82.4 percent.
— Financial Services: Income excluding net realized gains (losses) was $40 million for the quarter.

The entire release and additional financial information can be obtained on the company’s Website at: www.acelimited.com.

ACE will host its first quarter 2005 earnings conference call and webcast on Wednesday, April 27, 2005 beginning at 8:30 a.m. EDT. The earnings conference call will be available via live and archived webcast at www.acelimited.com or by dialing 888-889-5602 (within the United States) or 973-582-2734 (international). Please refer to the ACE Limited website in the Investor Information section under Calendar of Events for details.

A replay of the call will be available from Wednesday, April 27, 2005 until Friday, May 27, 2005. To listen to the replay dial 877-519-4471 (in the United States) or 973-341-3080 (international); passcode 5826870.

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